Small Cells Market Expected to Hit 3 Million Units by 2016
With the recent transition of the Femto Forum (News - Alert) being renamed the Small Cells Forum, news of small cell technology has been flooding the Web as of late. Although, the recent increase in adoption of small cells has certainly brought the innovative next generation technology to the forefront of the industry, small cells are in no way new in the broadband market.
In fact, just this week, market research firm Infonetics Research (News - Alert) released its latest Small Cell Equipment forecast report predicting the global small cell market to continue to grow rather quickly, with about 3 million small cells shipping and the market worth about $2.1 billion by 2016.
Small cells, or small cellular base stations, are specifically designed for use in residential or small business environments to provide cellular coverage to remote or underserved areas. The small cells connect to a service provider’s network via a broadband connection to extend coverage in areas where access is limited or unavailable.
So it’s no surprise that the leading driver behind the anticipated growth in the small cell market can be attributed to necessary capacity upgrades being made to urban areas. According to the Infonetics report, adoption of small cells growth is being driven by operators seeking to enhance saturated macrocellular networks that are currently struggling to maintain a decent mobile broadband experience for subscribers.
Infonetics expects public space femtocells to make up more than 50 percent of all small cells shipped in 2012 and in 2013, expects 3G small cells to make up 63 percent of global small cell shipments, with 4G small cells kicking off and ramping up rapidly to make up 37 percent.
“While small cells, including microcells and picocells, have been used for the past two decades to improve voice coverage, now mobile broadband is shifting the game to capacity upgrades,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
“Therefore, the chief objective is to complement and enhance the macrocell layer from a capacity standpoint with a new breed of low-power nodes like public space femtocells and Wi-Fi. But dividing the macro layers into smaller cells remains challenging due to inter-cell interference and backhaul issues. The question is: how small can the cell be? Because the smaller the cell, the higher the number of units required to cover an area, and that will determine the true size of the small cell market,” Téral added.
The study also noted that over the next 3 years, most operators are planning small cells only in the urban core and by 2015, 4G small cells will overtake 3G small cells entirely.
In terms of geographic location, early femtocell adopters dictate which regions represent the largest small cell opportunities, with Asia Pacific expected to lead with 44 percent of all units shipped in 2012, followed by EMEA with 32 percent. Some early adopters include AT&T, Softbank, and Vodafone (News - Alert) according to the report.
“Our small cell forecast is not a pie-in-the-sky, new-technology-honeymoon forecast based on futuristic 2020 technology visions of small cells on every city block. We developed our forecasts after a solid year of work by several Infonetics analysts and our research team with mobile operators, manufacturers, and chip suppliers,” said principal analyst and Infonetics co-founder Michael Howard (News - Alert). “We examined, discussed, challenged, and listened--often on multiple occasions--to the major footprint operators to learn about their thinking, planning, testing, and trialing across their realities of today's operations, budgets, target small cell pricing, sizing and form-factor requirements, emerging technology issues, location-sensitive pico-to-macrocell ratios, and small cell layer automation and coordination with the macro layer. And in all of this, we explored with them what they think is realistic over the next few years.”
Edited by Juliana Kenny